warehousing

Outlook 2021 for the Warehousing Sector: Betting Big on Technology

Post By : Basundhara Choudhury
Post Date : January 18, 2021
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Reading Time: 4 minutes

As the most unprecedented year for logistics and the supply chain industry meets its natural end, the year 2021 now surfaces as the beacon at the end of the tunnel- with new hopes, expectations and faith for a limping industry and economy to reclaim its lost glory. We take a look at the expectations and predictions for the warehousing sector as predicted and prophesied by stalwarts of the industry.

The warehousing sector is one of those segments that has stood the test of the pandemic and exhibited an even more promising growth in 2021. It has recorded positive growth despite the setbacks of the year.

The projected growth rate for the sector stands at an encouraging 35%.

As the economy expects a V-shape recovery in the days to come, it also signifies as positive rebound for the Warehousing sector, if all goes well.

“We foresee high progress in warehousing – be it more modern warehouse, use of automation in storage, handling as well as WMS (Warehouse Management System)”, shares Jasjit Sethi, CEO, TCI Supply Chain Solutions.

“Also we are witnessing modern warehousing clusters along with DFCs, Ports, and National Highways”, he adds.

Factors that will fuel the recovery of the warehousing sector

Warehousing sector,even during pandemic, remained largely unscathed and is only going to go from strength to strength from here on. Be it positive investor sentiment, a push for Ease in Doing business, and a favourable policy regime, all of it will only fuel the recovery.

“Warehousing sector is largely unaffected by trends such as remote working. Demand for quality Grade-A warehousing is strong as ever”, shares Sandeep Chadha, Managing Director, Pragati Warehouster.

“With a relative stagnancy in Residential and Commercial real estate, Warehousing is emerging as a preferred avenue among investors and Developers. Yes, Pre-COVID level vibrancy is achievable and is very much within the limits.”

~Sandeep Chadha, Managing Director, Pragati Warehouster 

The top factors that will likely stimulate growth and recovery of the warehousing segment are:

Robust Cold Chain Network: As per the ‘Indian Cold Chain Industry Outlook 2022’, the Indian cold supply chain sector is set to grow at a CAGR of 17-18%, till 2022, driven mostly by the much-awaited Covid19 vaccine, and other bio-pharmaceutical sectors. Further, growth of organised food retail, processed food market, government initiatives for agriculture supply chain and rise in nutraceuticals are other areas leading to accelerated growth of cold storage and cold supply chain.

Siddharth Y, Director – Marketing & Strategy, Exceed Logistics shares,“With India slating to become the biggest vaccine manufacturing hub in the world, the Pharma Supply Chain is going to take a whole, another level”.

E-commerce boom: Pushed to the fore by the pandemic, e-commerce has emerged as a major marketplace for everything conceivable, thanks to the New Normal. Driven by the comfort of ordering from home, paying online and receiving safe, contact less deliveries, e-commerce continues to be the preferred mode of shopping in the post COVID era, which is helping strengthen the logistics and supply chain network, specialised warehousing, and reverse logistics.

Investment in Warehousing real estate: The growth of industrial and warehousing real estate demand has sped up after the lockdown. With factors like 100% FDI and larger/ safer returns on industrial and warehousing, real estate large warehousing spaces will be the need of the hour.

Employee Safety at workplace:

Employee safety and welfare has taken centre stage thanks to the pandemic, and a long-term strategy of keeping the staff at the core of an organisation’s priorities will bode well for any company. In the longer run, this will lead to an overall growth for the sector, by involving well-being, keen participation and collaborations among the people.

“Our long-term strategy of keeping 70% associates on our role has helped in greatly ensured availability of people from the very first day when government allowed operations to resume. Further we also ensured that salaries were paid on time to all in full. FM Logistic India firmly believes that our employees are our biggest asset and hence, we take utmost care to ensure that all our collaborators have access to safe and secure working conditions.”

~Alexandre Amine Soufiani, Managing Director, FM India Supply Chain Private Ltd

Other factors:

In addition to the above factors, positive government policies and the international trade environment overall will propel India into becoming one of the top manufacturing hubs in the world.

“The warehousing sector has made tremendous progress in the past few years due to backing of both union as well as state governments. There have been policy reforms and initiatives to boost infrastructure development across the country to streamline the logistics cost. These reforms will also have a substantial contribution in the recovery of the sector.”

~Rajesh Jaggi, Vice Chairman – Real Estate, Everstone Group

The vaccination programs can also act as a stimulus for faster adoption of technology in warehouses, which Mr Jaggi believes may have a “long-term impact on reduction of human intervention in warehousing operations’.

Trends in Tech:

The prominence and necessity of technology has never been felt more strongly than during the pandemic, where it has placed itself in the core of every company’s list of priorities.

Robotics & Automation – Led by rapid technological advancements and greater affordability, robotics solutions have crept into the crevices of the logistics workforce, supporting zero-defect processes and boosting productivity. The industry has been marked with the first wave of automation using collaborative robotics and this will only continue in the years ahead.

Omni-channel Logistics – Omni Channel retail services have surfaced as the highlight of the year, with more and more companies realigning supply chains to cater to omni-channel from the same warehouses.

Connected Devices – Safe andSecure connected devices with real-time access to the consumer’s ecosystem can greatly support innovative pick-up and delivery services, as well as improved customer service support and valuable insight generation for logistics providers.

Augmented Reality – Augmented reality (AR) will certainly be embraced more in the coming days by providing new perspectives in logistics planning, process execution, and transportation.

Artificial Intelligence- Another gamechanger in Warehouse management, companies are voraciously utilising AI in the warehouse to boost efficiency, improve platforms and streamline the packing process.

AI emerged as the primary propellant for automation in the supply-chain industry. By crunching data from past operations, AI algorithms can perform basic operations automatically. This saves a large amount of time and eliminates the possibility of human error, thus making the operations more efficient. It also redirects the human capital to perform more complex tasks.”

~Prakash Patel, Founder and Managing Director, Bhumi World

AI, along with Blockchain and IoT will continue to change the game for efficient Warehouse management.

This is an abridged version of the Cover Story. To read the full article, click here.

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